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Sussex Drug Products v. Kanasco

argued: September 27, 1990.

SUSSEX DRUG PRODUCTS, A CORPORATION OF THE STATE OF NEW JERSEY, APPELLEE,
v.
KANASCO, LTD., A CORPORATION OF THE STATE OF MARYLAND, A/T/A/D/B/A JOHN D. COPANOS & SONS, INC.; JOHN D. COPANOS & SONS, INC., A CORPORATION OF THE STATE OF FLORIDA; AND JOHN D. COPANOS, AN INDIVIDUAL. KANASCO, LTD. AND JOHN D. COPANOS & SONS, INC., APPELLANTS



Appeal from the United States District Court for the District of New Jersey; D.C. Civil No. 86-05089.

Sloviter, Becker, and Weis, Circuit Judges.

Author: Weis

WEIS, Circuit Judge

Opinion OF THE COURT

In this suit growing out of the sale of adulterated pharmaceuticals, the district court entered partial summary judgment awarding compensatory damages for breach of contract and warranties and certified the judgment under Federal Rule of Civil Procedure 54(b). Remaining for disposition is a count for punitive damages based on the same sales. Because the partial summary judgment is not final, we will dismiss the appeal.

For a number of years, plaintiff Sussex Drug Products, purchased drugs for veterinary use manufactured by defendant Kanasco Ltd. and distributed by defendant John D. Copanos & Sons, Inc. In November 1986 the United States began forfeiture proceedings, alleging adulteration of quantities of those drugs in the plaintiff's possession. These proceedings were transferred to the Western District of Missouri and consolidated with similar actions filed in other districts.

In December 1986 plaintiff filed a civil action for damages in the District Court of New Jersey. After the District Court of Missouri granted the United States' motion for partial summary judgment on the issue of adulteration in the forfeiture cases, plaintiff here moved for summary judgment on liability in the New Jersey District Court citing issue preclusion. The District Court granted summary judgment on counts 1-4 seeking damages for breach of contract as well as various implied and expressed warranties. Those counts named both corporate defendants, but not the individual defendant.

Not included in the judgment was count five, alleging fraud on the part of the corporate defendants and the individual defendant John D. Copanos, president of the two companies. In addition to compensatory damages, this latter count asked for punitive damages.

Following a bench trial on damages, the District Court of New Jersey found the following to be due:

Purchase price of adulterated merchandise . . . $721,311.10

Storage fees for adulterated merchandise . . . 26,130.00

Lost profits. . . . . . . . . . . . . . . . . . 252,692.42

Prejudgment interest . . . . . . . . . . . . . 168,136.61

TOTAL . . . . . . $1,168,270.13

Judgment in the amount of $1,168,270.13 was entered against the defendants Kanasco, Ltd. and John D. Copanos & Sons, Inc.

Plaintiff asked the court to certify the partial judgment as final under Federal Rule of Civil Procedure 54(b), so as to permit enforcement. The district court granted the motion, concluding that the claim for fraud was discrete from those asserting breach of contract and warranty and that plaintiff had a legitimate concern about the collectability of the judgment against the corporate defendants. After appealing to this court, defendants moved for summary reversal ...


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